No. 12599 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1974 

MONTANA DEACONESS HOSPITAL, 

A NON-PROFIT CORPORATION, and 

PICKER CORPORATION, a New York 

Corpora tion, 

Plaintiffs and Respondents, 

CASCADE COUNTY, a body politic of 

the State of Montana et al., 

Defendants and Appellants. 

Appeal from: District Court of the Eighth Judicial District, 

Honorable R. J. Nelson, Judge presiding. 

Counsel of Record: 

For Appellants : 

J. Fred Bourdeau, County Attorney, Great Falls, Montana 

Michael T. Greely, Deputy County Attorney, argued, 

Great Falls, Montana 

For Respondents : 

Church, Harris, Johnson and Williams, Great Falls, 

Montana 

Earl J. Hanson argued, and Robert P. Goff argued, 

Great Falls, Montana 

For Amicus Curiae: 

Cure and Borer, Great Falls, Montana 

Submitted: March 20, 1974 

Decided : APR 17 1974 

Filed : APR 17 19% 
Mr. Justice Frank I. Haswell delivered the Opinion of the Court. 

This is an action to recover taxes paid to the defendant 

Cascade County on certain personal property used exclusively for 

hospital purposes under a lease agreement between the plaintiffs. 

The Hon. R. J. Nelson, district judge, granted plaintiffs' motion 

for summary judgment. From this judgment, the County appeals. 

Plaintiff, Montana Deaconess Hospital, is a nonprofit 

hospital in Great Falls, Montana. The hospital leased certain 

X-ray equipment from the coplaintiff, Picker Corporation, under 

an agreement for a stipulated monthly rental. In addition the 

hospital was required to reimburse the Picker Corporation for any 

taxes assessed on the equipment. This X-ray equipment was used 

exclusively for hospital purposes. 

On March 29, 1972, the Cascade County treasurer issued 

a personal property tax statement for the year 1972 to Picker 

Corporation in the amount of $10,839.96. Included in the statement was an amount of $8,004.62 assessed upon said equipment 

leased by Picker Corporation to the hospital. Picker Corporation, 

believing said taxes to be due, paid the full amount to Cascade 

County. Subsequently they requested reimbursement from the hospital pursuant to the terms of the lease. 

On July 12, 1972, both the hospital and Picker Corporation 

petitioned the Cascade County commissioners for a refund of the 

tax on the grounds that the hospital was a nonprofit corporation 

and the property was exempt from taxation under section 84-202, 

R.C.M. 1947. The petition was filed in accord with section 84- 

4176, R.C.M. 1947. 

The Board of County Commissioners denied the petition, 

and subsequently plaintiffs filed this complaint for refund in 

district court on October 4, 1972. Plaintiffs' motion for summary 

judgment was granted on August 2, 1973. From this judgment the 
County has filed this appeal. 

In addition to the parties to this appeal, the Sisters 

of Charity of Providence of Montana, owners and operators of the 

Columbus Hospital in Great Falls, appeared as amicus curiae by 

way of brief and oral argument. 

The sole issue presented for review is whether personal 

property leased by a nonprofit hospital and used exclusively for 

hospital purposes is exempt from taxation even though the lessor, 

a private profit corporation, received a profit from said lease. 

The pertinent statute involved in this action is section 

84-202, R.C.M. 1947, which was enacted by the legislature pursuant 

to authority of Article XII, section 2 of the 1889 Montana Constitution, now Art. VIII, section 5 of the 1972 Constitution. 

Section 84-202 grants tax exemptions for certain classes of property. That section states in part: 

"The property of the United States, the state, 

counties, cities, towns, school districts, municipal corporations, public libraries, * * * such 

other property as is used exclusively for agricultural and horticultural societies, for educational purposes, places of actual religious worship, hospitals and places of burial not used or 

held for private or corporate profit * * * are 

exempt from taxation * * *." (Emphasis added.) 

The hopsital and Picker Corporation's argument is that the 

statute exempts, among others, two classes of property from 

taxation: property owned by certain specified entities and property used for certain specific purposes. In the first class of 

exemptions all property owned by governmental entities is exempt 

from taxation, regardless of the manner of its use. The second 

class of property exempted by the statute is property used exclusively for specific purposes, including use for hospital purposes by nonprofit hospitals. They argue that the statutory exemption is not dependent upon ownership but exempts all property used 

exclusively for hospital purposes by a nonprofit hospital. 
It is the County's contention that every claim for' 

exemption from taxation should be denied unless the exemption 

is granted so clearly as to leave no room for any fair doubt. 

Cruse v. Fischl, 55 Mont. 258, 175 P. 878. The County argues 

that the language of section 84-202, R.C.M. 1947 is not clear 

and could be subject to several interpretations. The County 

contends that while the nonprofit hospitals themselves are 

clearly exempt from taxation, nothing contained in section 84- 

202 exempts all property used exclusively for hospital purposes 

regardless of the commercial profit that may be derived from such 

property. The County argues that in the instant case Picker 

Corporation owns the property in question and derives a significant profit from the property. The County further contends that 

section 84-202 contains a strong legislative intent to prohibit 

exemptions where corporate or private profit is realized; thus, 

said X-ray equipment under lease to the hospital is a taxable 

interest in personal property. Allen v. Multnomah County, 179 

Or. 548, 173 P.2d 475; Ross v. City of Long Beach, 24 Cal.2d 258, 

148 P.2d 649. 

This same question was under consideration in N.W. Imp. 

Co. v. Rosebud Co., 129 Mont. 412, 288 P.2d 657. There this Court 

discussed the various views on the subject matter and demonstrated 

the split of authority throughout the country. That case, however, may be distinguished. In N.W. Imp. Co., unlike the instant 

case, the Court found that the private company that was leasing 

property to the exempt school district was not deriving any economic advantage from the lease of the building. The rental on the 

lease agreement was so adjusted that at the end of its estimated 

life the private company would have returned to it only the actual 

cost of construction without any interest. 

Although N.W. Imp. Co. is thus distinguishable, the 
reasoning used in that case may be extended to exempt from 

taxation the property in question here. This we believe to be 

in accord with the legislative intent of section 84-202, R.C.M. 

1947. 

It is a well accepted principle of statutory construction 

that the function of the Court is to interpret the intention of 

the legislature, if at all possible, from the plain meaning of 

the words used, and if the meaning of the statute can be determined from the language used, the Court is not at liberty to add 

or detract language from the statute in question. Sections 

93-401-15, 93-401-16, R.C.M. 1947; Nice v. State Board of Equalization, 161 Mont. 448, 507 P.2d 527, 30 St.Rep. 284. 

The fact that the statute creates several classes of 

exemptions, based in one case on "ownership" and in the other case 

upon "use", reveals a clear legislative intent to exclude "ownership" of property as a criterion in determining the applicability 

of the exemption to property "used exclusively for hospitals". To 

require that hospitals own the property, in addition to the requirement that they use the property only for hospital purposes, would 

necessitate inserting the words "owned by" or words of similar 

import, so that the relevant clause would read "property owned by 

and used exclusively for * * * hospital purposes." To insert these 

suggested words into this statute would give to it an added meaning not to be found in the plain and unambiguous language of the 

statute. See Ross v. City of Long Beach, 24 Cal.2d 258, 148 P.2d 

649; Scott v. Society of Russian Israelites, 59 Neb. 571, 81 N.W. 

624. 

The legislative purpose in creating the tax exemption 

appears to be lower costs of hospital care, which in turn means 

lesser expenses for patients. To deny the exemption here would 

add an additional expense to the rental price already paid for 
the equipment. If the equipment here is taxable to Picker Corporation it is reimbursable to them by the hospital whose patients would bear the taxes in the form of increased hospital 

charges. This would be directly contrary to the purpose of the 

exemption. 

For these reasons the judgment of the district court is 

affirmed. 

Justice 

We concur;.)